Compensation for Print Materials
EricaZoller
Member Posts: 2
Hey guys -
Accounting rookie here. I am curious to know how I would record income from a client where it technically isn't a 'sale'. For example, if I pay for a print item for a client and then they pay me back for it, how do I record it to where it doesn't show as income? I'm SURE this is basic accounting principle, but I don't think my search keywords are yielding the correct results.
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Hi Erica! We've got a reimbursable expenses article that covers the basics for this type of transaction.
Out of curiosity, in your field, with what frequency do you find yourself needing to record a reimbursement on an invoice?
Hey Charlotte! Thanks for the reply. I have them set up as reimbursable expenses right now, but they still add to my overall income/profit. I definitely don't want to pay quarterly business tax on print materials for my clients!
I invoice weekly for print materials and some can be as much as $2K. When it shows as income, to my CPA, I owe nearly 40% on the 2K expense...that isn't truly income. Make sense?
I’m interested in this too — I didn’t think reimbursable expenses on my invoices would count towards income!
Can we just deduct the amount of Reimbursable expenses account from the total of other income accounts? However won’t that account actually be at zero once all invoices including expenses have been paid (which might resolve EricaZoller’snconcerns about tax)? How about creating separate invoices for Expenses that are reimbursed as a way to keep them separate?
Hi @ashley. I'd really recommend talking to an accountant to learn more about this. They'll be able to advise much better than I can.
My understanding is that it has to be considered income, since any money coming into your accounts is income, and any money leaving your hands is an expense. If you follow the guide posted by Charlotte, those will balance out in the Reimbursed Expense account in the end.
It wouldn't be necessary to make separate invoices, since you can set categories by products, and use that to track your reimbursements in your reports.